Cosmos Labs got it wrong. The organization now says it incorrectly dismissed a vulnerability that attackers went on to exploit across six blockchain networks, extracting about $5.7 million. The admission came in a technical post-mortem published Friday.
Between Aug. 20 and Aug. 25, attackers pulled roughly $2.87 million through decentralized exchanges and another $2.85 million through centralized exchanges, the post-mortem states. Centralized exchange accounts holding the proceeds have been frozen while authorities investigate, Cosmos Labs said. As of Aug. 28, no tokens had been recovered, according to MANTRA Chain, the network hit hardest.
The flaw sits in Cosmos EVM, the ecosystem’s native Ethereum-compatible framework built from the open-source Evmos codebase. It is an integer underflow. A researcher reported it through the Cosmos bug bounty program on April 25, 2026. Cosmos Labs testers tried to reproduce the attack against the configuration live Cosmos chains used. They could not. Their conclusion: funds on those networks were not at risk.
“Based on that assessment, Cosmos Labs addressed the vulnerability through its silent, public patch process rather than the private patch distribution process used when a vulnerability is believed to threaten live user funds,” the report said. The fix was merged in May under that silent process, which the firm said has handled 37 vulnerabilities over the past 13 months.
Then independent researchers weighed in during early August. Their finding: the bug affected all Cosmos EVM chains, not just certain configurations. Cosmos Labs scrambled to push a public patch. It went out at 7:01 p.m. ET on Aug. 19. The release notes referenced “important” security fixes without describing them.
The first attack began at 3:06 p.m. ET on Aug. 20, about 20 hours later.
Roughly 12 hours before that first theft, a developer at Push Chain filed a public code change describing the vulnerability and its exploitation path, crediting an audit by security firm Hacken. The report said no released version contained the fix, though its version table omitted v0.6.2 and v0.7.2, which had been published about eight hours earlier. Cosmos Labs called the public disclosure of an exact exploit path “highly unusual” and said it can increase the risk of an exploit.
Here is how the exploit worked, as Cosmos Labs describes it. An attacker set up an account holding locked tokens, delegated more to a validator than the account could spend, and the balance subtracted past zero. It underflowed to a 78-digit maximum of 2^256-1 base units. Step two reversed the arithmetic. The inflated balance went to a target account, overflowed back down, and the attacker walked away holding the target’s tokens. The target was left with nothing. No tokens were created. MANTRA said the exploit moved its supply by a single base unit.
MANTRA lost 720.9 million tokens, then worth about $3.6 million. The funds were drained from its burn address and a dormant multisig wallet left over from an earlier incentive campaign. The network halted at 7:13 p.m. ET on Aug. 20 and came back roughly 30 hours later on patched software, without a rollback. The halt froze about 38 million MANTRA in the attacker’s wallet. By then, the attacker had already moved 94.7% of the stolen tokens to a single exchange deposit address across 15 transfers.
TAC, a chain bringing DeFi to TON and Telegram users, lost nearly 3 billion TAC from its staking pool on Aug. 22. About 1.2 billion tokens were sold on BNB Chain for roughly $950,000. KiiChain, a foreign-exchange infrastructure network, lost about 148 million KII the same evening. Of that, 64.6 million KII sold for about $1.6 million. Roughly 54% of the KII taken remains recoverable onchain if the network is restored.
Three further chains were attacked using the same method. Cosmos Labs did not name them.
Bubblemaps identified the AI-focused network Nesa as affected in an Aug. 26 analysis. An attacker bought about $250,000 of NES, bridged it, used the bug to inflate a balance 200-fold, and moved $50 million of NES back to Ethereum. Extreme slippage left only $60,000 in profit. Bitvavo suspended NES deposits and withdrawals on Aug. 24, citing a “critical consensus vulnerability.” Cosmos Labs did not name Nesa, and Nesa has not published its own post-mortem. Bubblemaps flagged enough operational differences in the Nesa attacker’s funding and execution that a separate party may have been responsible.
MANTRA disputes the patch timeline. “Twenty hours was not a realistic window in which to assess, build, test and coordinate a state-breaking upgrade across 38 independent validators, particularly without a vulnerability-specific advisory,” MANTRA said in its own post-mortem. It added that the Push Chain security finding was filed 11 hours and 45 minutes before the attacker’s first probe, and that the attacker’s wallet was funded almost four hours before that finding was filed. “We state the timing as fact and draw no conclusion from it.”
KiiChain went further. Its own post-mortem, published Aug. 23, landed five days before Cosmos Labs spoke. “Cosmos Labs gave no advance notice to downstream chains, did not flag the release as security critical, and did not tell affected chains that a public release had happened until Friday 21 August, two days later,” it said. Cosmos Labs only recommended halting on Aug. 22. By then, MANTRA, TAC, and KiiChain had all been hit.
“A patch takes days to review, build, test and roll out across a validator set,” KiiChain said. “A halt takes minutes.”
KiiChain also said the exploit required three upstream defects, not two, and that only the underflow has been patched publicly. MANTRA’s post-mortem takes the opposite view, describing the underflow fix as “the control that closes this attack path” and saying it verified that against a working reproduction. Cosmos Labs describes two chained vulnerabilities and does not address KiiChain’s claim that a third upstream defect remains unpatched.
Cosmos Labs said it coordinated with 40 chains during the response and worked with 13 others to patch or halt before they were attacked. The firm does not hold a complete registry of the more than 115 public blockchains in the broader Cosmos ecosystem. During the response, it discovered 11 previously unregistered Cosmos EVM deployments.
MANTRA traded near $0.0043 on Saturday, down about 70% year-to-date, according to CoinGecko. The network cut staff during a restructuring after its token collapsed in 2025 and is being acquired by existing backer Inveniam Capital Partners in a deal expected to close this quarter. Holders, as ever, are divided.
